Maximize the Value of a Potential Business Acquisition or Partnership with a Thorough Investigation
An investor, friend, or fellow businessperson just suggested a merging of business. They give you a sales pitch that makes a merger or acquisition sound like the perfect opportunity for everyone. They show you the numbers and what the future projections look like, and it seems like a great idea. However, there can always be something underneath the surface that can cause a major profit loss for you.
No matter how great the opportunity may sound or what the numbers look like on paper, it is crucial to have legal due diligence and also your own investigation. The more information you can gather about the business, the better you can make the best business decision.
To provide some insight into the information you want to gather before an acquisition, we have provided a few factors to consider investigating.
Background Check on the Business Owner
No matter how close of a relationship you have with a potential business partner, it is important to conduct a background check on the current business owner – just like you would with any employee. How many other businesses did they own before? How many now? Does the person have a criminal record that raises red flags? The more you find out about the buyer or seller, the better you will feel doing business with him or her.
History of Their Business
What is their company structure? Employee retention rate? Is the company a liability or had a history of being a liability? Before a business merger or acquisition, you need to see the full scope of the company from its beginnings to future forecasts. A company will often provide you with the documents that you request, but it is best to do your own research to ensure you are receiving the most accurate numbers.
History of Bankruptcy and Finances
Having an understanding of the business’s asset to debt ratio is a crucial factor for determining potential loss or profits. For example, a business that has recently filed for bankruptcy may not have as much value as one that has never filed or remained steady years after the restructure.
A private investigator may go through a business owner’s public records to look for any previous bankruptcy or UCC filings. These types of records can provide insight into a business’s finances and profitability potential.
[RELATED: What Do Public Records Show?]
Social Network Investigation
A profitable business will often have a positive online presence and following. From social media presence to the web site’s design, investigating a company’s brand and how it is perceived online can spare you from a potential loss in profits. Did the company buy reviews to inflate their ratings? Strength of brand loyalty? Does the company actually look legit online? These are minor but significant factors to consider before acquiring a business.
Verify All the Information Provided to You
No matter how close you are with the person or how good the deal the person makes the deal sound, it is in your best interest to verify any lingering questions with fact-based evidence. Chilton Gibbs & Associates provide thorough and professional records research and due diligence services to maximize the value of a potential partnership, merger, or acquisition.
For more information, read more about our business intelligence service. To schedule a free consultation with a licensed private investigator, call our firm today at 866-217-8581.